C.B.O.’s Take on the Stimulus

A certain ritual plays out whenever the director of the Congressional Budget Office testifies before a House or Senate committee. While partisans from each side try to score ideological points about spending or taxes, he has to remain studiously neutral, sticking to the numbers and inevitably frustrating his questioners.

On Wednesday, however, Douglas Elmendorf, the current director, annoyed Republicans on the House Budget Committee a little more than usual when they made several unsuccessful attempts to get him to say that President Obama’s stimulus program was a failure.

First, Bill Flores, Republican of Texas, asked him which was more effective at increasing economic activity, private- or public-sector spending. The congressman clearly wanted the answer to be private-sector, but Mr. Elmendorf wouldn’t help him, saying both would be equally effective. Mr. Flores pushed on anyway, asking why a second stimulus would be any more effective than the first one.
“But Congressman,” Mr. Elmendorf replied, “as you understand –and I recognize you don’t agree with us – but our position is that the recovery act was not a failed program. Our position is that it created higher output and employment than would have occurred without it.”

To which the congressman could only respond, rather sarcastically, “Thank you, that was fascinating.”

A few minutes later, Tim Huelskamp, a freshman Republican from Kansas, made the often-stated point that the stimulus didn’t bring the jobless rate down as low as the Obama administration predicted it would, and demanded to know how that could have happened.

Mr. Elmendorf explained that the recession turned out to be far deeper than anyone had anticipated, but said a University of Chicago survey of distinguished economists showed that 80 percent of them believed the stimulus was good for the economy.

“Because of the recovery act, the unemployment rate was lower at the end of 2010 than it would have been without the stimulus bill,” he said. In fact, he said, it saved or created more than 3 million jobs.

Republicans quickly changed the subject. To them, the Recovery Act will always be the “failed stimulus program,” and they’d rather not hear any information to the contrary. Particularly from someone who knows what he’s talking about.